Daily News - Monday, 3 March 2025
Foreign investment share in India's GDP on decline, says World Bank (Financial Chronicle)
India’s foreign direct investment (FDI) as a share of GDP has more than halved over the past two decades, averaging just 1.6% compared to Vietnam’s ~6%, Malaysia’s 3.3%, China’s 3.1%, and the OECD average of 2.8%, despite India being among the top-10 global FDI destinations. While regulatory restrictions were halved between 2003-2020, particularly in services like broadcasting, media, retail, and telecom, India still imposes equity restrictions in legal and accounting services, real estate, and business services, limiting its FDI potential. With Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Delhi NCR attracting over 75% of total FDI, the World Bank suggests India should streamline minimum investment requirements, support firms in meeting local sourcing mandates, and resolve policy inconsistencies between national and state governments to enhance FDI inflows.
Daal diplomacy: Pleasing the US, punishing Canada (mint)
India is considering allowing duty-free imports of U.S. pulses, particularly lentils and dry peas, under a proposed bilateral trade agreement to strengthen ties with Washington while reducing reliance on Canada, whose trade relations with India have deteriorated. Despite a rise in domestic lentil production from 1.27 million tonnes (MT) in FY22 to 1.8 MT in FY24, India still faces an annual supply shortfall of about 1 MT, leading to continued reliance on imports, with Canada supplying 0.53 MT, Australia 0.35 MT, and the U.S. only 0.05 MT in FY25 (till January). The move, which aligns with India’s strategy of balancing domestic production growth and trade commitments, could impact Canadian and other suppliers while benefiting the U.S., Australia (which enjoys a 50% tariff reduction under the Australia-India Economic Cooperation and Trade Agreement), and domestic farmers by preventing price drops due to excessive imports.
Chhattisgarh in production talks with US, Russian defence firms: CM (mint)
Chhattisgarh is actively courting defence firms from Russia and the U.S. under its Industrial Development Policy 2024-30, aiming to establish itself as a key defence manufacturing hub, with investment proposals worth ₹6,000 crore secured during its recent summit in Mumbai and an overall target of ₹1 trillion in investments. The policy offers financial incentives, including electricity duty concessions, stamp duty waivers, provident fund reimbursements, and transport subsidies, with defence manufacturers required to invest at least ₹10 crore in plant and machinery to qualify, while suppliers must invest a minimum of ₹1.4 crore. While the state is leveraging its Durg-Bhilai-Raipur industrial belt for defence production, it is also expanding renewable energy, which currently contributes a third of its 9,176 MW power generation, though challenges like land scarcity due to dense forests and water bodies are being addressed through initiatives like floating solar panels and hydroelectric expansion.
Railways’ 2030 Net Zero Plan Builds on Renewable, Nuclear and Thermal Power (The Economic Times)
Indian Railways will adopt a mix of nuclear, solar, hydropower, wind, and thermal energy under its Net Zero 2030 strategy to meet its 10-gigawatt (GW) traction power requirement, with plans to source 3 GW each from renewable and thermal/nuclear energy while securing the remaining 4 GW through power distribution company tie-ups. A senior official stated that 2 GW of nuclear power has been requested from the power ministry, 2 GW of thermal power will come from joint ventures and purchase agreements, and 1.5 GW of hydropower projects are in the planning stage, alongside 500 megawatts of round-the-clock renewable energy tie-ups. With 95% of trains expected to run on electricity from 2025-26, direct carbon emissions will reduce to 1.37 million tonnes annually—offset through afforestation—while diesel-powered trains have already declined from 37% to 10% in three years, leading to significant cost savings, with diesel expenditure projected to fall to ₹9,528.53 crore in 2025-26, the lowest in over a decade.
Wages not Keeping Pace with Inflation, Says Niti's Virmani (The Economic Times)
NITI Aayog member Arvind Virmani stated that while India’s employment rate has been rising, real wages for regular jobs have not kept pace with inflation over the past seven years, as shown by the Periodic Labour Force Survey (PLFS), which indicates a growing worker-population ratio. He emphasized that India has a demographic advantage and stressed the need to improve education and training quality to maximize workforce potential. Virmani also mentioned that the government will release the second phase of the Investment Friendliness Index of States within the next two months, which will help states identify regulatory barriers and improve their business environment to attract more private investment, fostering healthy competition among them.
